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[Federal Register Volume 88, Number 243 (Wednesday, December 20, 2023)]
[Rules and Regulations]
[Pages 87895-87897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27934]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / 
Rules and Regulations

[[Page 87895]]

FEDERAL RESERVE SYSTEM

12 CFR Part 228

[Regulation BB; Docket No. R-1826]
RIN 7100-AG 73

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 345

RIN 3064-AF98

Community Reinvestment Act Regulations Asset-Size Thresholds

AGENCY: Board of Governors of the Federal Reserve System (Board); 
Federal Deposit Insurance Corporation (FDIC).

ACTION: Joint final rule; technical amendment.

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SUMMARY: The Board and the FDIC (collectively, the Agencies) are 
amending their Community Reinvestment Act (CRA) regulations to adjust 
the asset-size thresholds used to define ``small bank'' and 
``intermediate small bank.'' As required by the CRA regulations, the 
adjustment to the threshold amount is based on the annual percentage 
change in the Consumer Price Index for Urban Wage Earners and Clerical 
Workers (CPI-W).

DATES: Effective January 1, 2024.

FOR FURTHER INFORMATION CONTACT: 
    Board: Amal S. Patel, Senior Counsel, (202) 912-7879, Division of 
Consumer and Community Affairs; or Sumeet Shroff, Counsel, (202) 973-
5085, Legal Division, Board of Governors of the Federal Reserve System, 
20th Street and Constitution Avenue NW, Washington, DC 20551. For users 
of Telecommunications Device for the Deaf (TDD) and TTY-TRS, please 
call 711 from any telephone, anywhere in the United States.
    FDIC: Patience R. Singleton, Senior Policy Analyst, Supervisory 
Policy Branch, Division of Depositor and Consumer Protection, (202) 
898-6859, [email protected]; or Sherry A. Betancourt, Counsel, (202) 
898-6560, [email protected], or Alys V. Brown, Senior Attorney, 
(202), 898-3565, [email protected], Legal Division, Federal Deposit 
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

Background and Description of the Joint Final Rule

    The Agencies' CRA regulations establish CRA performance standards 
for small and intermediate small banks. The CRA regulations define 
small and intermediate small banks by reference to asset-size criteria 
expressed in dollar amounts, and they further require the Agencies to 
publish annual adjustments to these dollar figures based on the year-
to-year change in the average of the CPI-W, not seasonally adjusted, 
for each 12-month period ending in November, with rounding to the 
nearest million. 12 CFR 228.12(u)(2) and 345.12(u)(2). This adjustment 
formula was first adopted for CRA purposes by the Board, the Office of 
the Comptroller of the Currency (OCC), and the FDIC on August 2, 2005, 
effective September 1, 2005. 70 FR 44256 (Aug. 2, 2005). At that time, 
the Agencies noted that the CPI-W is also used in connection with other 
Federal laws, such as the Home Mortgage Disclosure Act. See 12 U.S.C. 
2808; 12 CFR 1003.2. On March 22, 2007, and effective July 1, 2007, the 
former Office of Thrift Supervision (OTS), the agency then responsible 
for regulating savings associations, adopted an annual adjustment 
formula consistent with that of the other Federal banking agencies in 
its CRA rule previously set forth at 12 CFR part 563e. 72 FR 13429 
(Mar. 22, 2007).
    Pursuant to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act),\1\ effective July 21, 2011, CRA 
rulemaking authority for Federal and State savings associations was 
transferred from the OTS to the OCC, and the OCC subsequently 
republished, at 12 CFR part 195, the CRA regulations applicable to 
those institutions.\2\ In addition, the Dodd-Frank Act transferred 
responsibility for supervision of savings and loan holding companies 
and their non-depository subsidiaries from the OTS to the Board, and 
the Board subsequently amended its CRA regulation to reflect this 
transfer of supervisory authority.\3\
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ See OCC interim final rule, 76 FR 48950 (Aug. 9, 2011).
    \3\ See Board interim final rule, 76 FR 56508 (Sept. 13, 2011).
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    The OCC has determined that it will adjust the asset-size criteria 
for institutions that are subject to OCC-issued CRA regulations, 
including national banks and Federal and State savings associations, by 
a means separate from this rulemaking process.
    The threshold for small banks was revised most recently in December 
2022 and became effective January 1, 2023. 87 FR 78829 (Dec. 23, 2022). 
The current CRA regulations provide that banks that, as of December 31 
of either of the prior two calendar years, had assets of less than 
$1.503 billion are small banks. Small banks with assets of at least 
$376 million as of December 31 of both of the prior two calendar years 
and less than $1.503 billion as of December 31 of either of the prior 
two calendar years are intermediate small banks. 12 CFR 228.12(u)(1) 
and 345.12(u)(1). This joint final rule revises these thresholds.
    During the 12-month period ending November 2023, the CPI-W 
increased by 4.06 percent. As a result, the Agencies are revising 12 
CFR 228.12(u)(1) and 345.12(u)(1) to make this annual adjustment. 
Beginning January 1, 2024, banks that, as of December 31 of either of 
the prior two calendar years, had assets of less than $1.564 billion 
are small banks. Small banks with assets of at least $391 million as of 
December 31 of both of the prior two calendar years and less than 
$1.564 billion as of December 31 of either of the prior two calendar 
years are intermediate small banks. The Agencies also publish current 
and historical asset-size thresholds on the website of the Federal 
Financial Institutions Examination Council at https://www.ffiec.gov/cra/.

Administrative Procedure Act and Effective Date

    Under 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA), 
an agency may, for good cause, find (and incorporate the finding and a 
brief statement of reasons therefore in the rules issued) that notice 
and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest.

[[Page 87896]]

    The amendments to the regulations to adjust the asset-size 
thresholds for small and intermediate small banks result from the 
application of a formula established by a provision in the respective 
CRA regulations that the Agencies previously published for comment. See 
70 FR 12148 (Mar. 11, 2005), 70 FR 44256 (Aug. 2, 2005), 71 FR 67826 
(Nov. 24, 2006), and 72 FR 13429 (Mar. 22, 2007). As a result, 
Sec. Sec.  228.12(u)(1) and 345.12(u)(1) of the Agencies' respective 
CRA regulations are amended by adjusting the asset-size thresholds as 
provided for in Sec. Sec.  228.12(u)(2) and 345.12(u)(2).
    Accordingly, the Agencies' rules provide no discretion as to the 
computation or timing of the revisions to the asset-size criteria. For 
this reason, the Agencies have determined that publishing a notice of 
proposed rulemaking and providing opportunity for public comment are 
unnecessary.
    The effective date of this joint final rule is January 1, 2024. 
Under 5 U.S.C. 553(d)(3) of the APA, the required publication or 
service of a substantive rule shall be made not less than 30 days 
before its effective date, except, among other things, as provided by 
the agency for good cause found and published with the rule. Because 
this rule adjusts asset-size thresholds consistent with the procedural 
requirements of the CRA rules, the Agencies conclude that it is not 
substantive within the meaning of the APA's delayed effective date 
provision. Moreover, the Agencies find that there is good cause for 
dispensing with the delayed effective date requirement, even if it 
applied, because their current rules already provide notice that the 
small and intermediate small asset-size thresholds will be adjusted as 
of December 31 based on 12-month data as of the end of November each 
year.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
when a general notice of proposed rulemaking is not required. 5 U.S.C. 
603 and 604. As noted previously, the Agencies have determined that it 
is unnecessary to publish a general notice of proposed rulemaking for 
this joint final rule. Accordingly, the RFA's requirements relating to 
an initial and final regulatory flexibility analysis do not apply.

Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) states 
that no agency may conduct or sponsor, nor is the respondent required 
to respond to, an information collection unless it displays a currently 
valid Office of Management and Budget (OMB) control number. The 
Agencies have determined that this final rule does not create any new, 
or revise any existing, collections of information pursuant to the 
Paperwork Reduction Act. Consequently, no information collection 
request will be submitted to the OMB for review.

Riegle Community Development and Regulatory Improvement Act of 1994

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (RCDRIA) (12 U.S.C. 4802) requires that each 
Federal banking agency, in determining the effective date and 
administrative compliance requirements for new regulations that impose 
additional reporting, disclosure, or other requirements on insured 
depository institutions (IDIs), consider, consistent with principles of 
safety and soundness and the public interest, any administrative 
burdens that such regulations would place on depository institutions, 
including small depository institutions, and customers of depository 
institutions, as well as the benefits of such regulations.\4\ In 
addition, new regulations and amendments to regulations that impose 
additional reporting, disclosures, or other new requirements on IDIs 
generally must take effect on the first day of a calendar quarter that 
begins on or after the date on which the regulations are published in 
final form.\5\
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    \4\ 12 U.S.C. 4802(a).
    \5\ 12 U.S.C. 4802(b).
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    Because the final rule does not impose additional reporting, 
disclosure, or other requirements on IDIs, section 302 of RCDRIA does 
not apply. Nevertheless, the requirements of section 302 of RCDRIA, and 
the administrative burdens and benefits of the final rule, were 
considered as part of the overall rulemaking process.

Congressional Review Act

FDIC

    For purposes of Congressional Review Act, the OMB makes a 
determination as to whether a final rule constitutes a ``major'' 
rule.\6\ If a rule is deemed a ``major rule'' by the OMB, the 
Congressional Review Act generally provides that the rule may not take 
effect until at least 60 days following its publication.\7\
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    \6\ 5 U.S.C. 801 et seq.
    \7\ 5 U.S.C. 801(a)(3).
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    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in--(A) 
an annual effect on the economy of $100,000,000 or more; (B) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies or geographic regions; or 
(C) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.\8\ As required by the Congressional Review Act, the 
FDIC will submit the final rule and other appropriate reports to 
Congress and the Government Accountability Office for review.
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    \8\ 5 U.S.C. 804(2).
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List of Subjects

12 CFR Part 228

    Banks, Banking, Community development, Credit, Federal Reserve 
System, Investments, Reporting and recordkeeping requirements.

12 CFR Part 345

    Banks, Banking, Community development, Credit, Investments, 
Reporting and recordkeeping requirements.

FEDERAL RESERVE SYSTEM

12 CFR Chapter II

    For the reasons set forth in the common preamble, the Board of 
Governors of the Federal Reserve System amends part 228 of chapter II 
of title 12 of the Code of Federal Regulations as follows:

PART 228--COMMUNITY REINVESTMENT (REGULATION BB)

0
1. The authority citation for part 228 continues to read as follows:

    Authority: 12 U.S.C. 321, 325, 1828(c), 1842, 1843, 1844, and 
2901 et seq.

0
2. In Sec.  228.12, revise paragraph (u)(1) to read as follows:

Sec.  228.12  Definitions.

* * * * *
    (u) * * *
    (1) Definition. Small bank means a bank that, as of December 31 of 
either of the prior two calendar years, had assets of less than $1.564 
billion. Intermediate small bank means a small bank with assets of at 
least $391 million as of December 31 of both of the prior two calendar 
years and less than $1.564 billion as of December 31 of either of the 
prior two calendar years.
* * * * *

[[Page 87897]]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the common preamble, the Federal 
Deposit Insurance Corporation amends part 345 of chapter III of title 
12 of the Code of Federal Regulations to read as follows:

PART 345--COMMUNITY REINVESTMENT

0
3. The authority citation for part 345 continues to read as follows:

    Authority: 12 U.S.C. 1814-1817, 1819-1820, 1828, 1831u and 2901-
2908, 3103-3104, and 3108(a).

0
4. Section 345.12 is amended by revising paragraph (u)(1) to read as 
follows:

Sec.  345.12  Definitions.

* * * * *
    (u) * * *
    (1) Definition. Small bank means a bank that, as of December 31 of 
either of the prior two calendar years, had assets of less than $1.564 
billion. Intermediate small bank means a small bank with assets of at 
least $391 million as of December 31 of both of the prior two calendar 
years and less than $1.564 billion as of December 31 of either of the 
prior two calendar years.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority.
Ann E. Misback,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    Dated at Washington, DC, on December 13, 2023.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2023-27934 Filed 12-19-23; 8:45 am]
BILLING CODE 6210-01-P; 6714-01-P
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